Strategic Fixed Income: concoction of stress factors



This video was recorded on Tuesday 9 October 2018.

An unhealthy concoction of factors are creating a classically late-cycle feel in the markets. In a challenging time for bond managers, John Pattullo, Co-Head of Strategic Fixed Income, simplifies the conundrums and shares his views.

Key points:
  • While secular trends have remained entrenched, the last two years have been characterised by a reflation trade, primarily driven by China reflating the world in 2015-16
  • There is a divergence in equity markets — US growth equities versus European value 
  • There is a clear contradiction in the narratives from the bond and equity markets
  • John believes the technical breakout in yields is more of a false dawn
  • John also believes the unhealthy concoction of factors will prove to be a buying opportunity for bonds in a few months’ time

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